Dual moves by Saga Communications on Wednesday to exit the TV ownership business and expand in its radio station footprint signals the company’s longer term faith to invest in middle market radio stations it deems as unique.
Saga is selling TV stations in Joplin, Mo., Pittsburg, Kan., and Victoria, Texas, for $66.6 million to Morgan Murphy Media. The broadcaster also announced it is spending some of those profits on four FMs, one AM radio station and several translators in Charleston, S.C., and three more FMs and two translators in Hilton Head and Beaufort, S.C. The radio station package sends $23.0 million to Apex Media Corp. for the properties.
“Saga intends to continue building its business in radio by continuing to identify and acquire middle markets stations,” said Ed Christian, president and CEO of Saga. “We made a very difficult decision that with all the changes taking place in the television industry that it was time for us to return to our roots in radio.”
Christian described the new radio acquisitions in Charleston as “heritage radio stations that are tightly focused on serving their communities.” The Hilton Head stations “serve a regional market that will give us very strong developmental opportunities,” he added in a company press release.
Saga reported last week first quarter revenue decreased 4.1% ($1.3 million) to $31.4 million for the quarter ended March 31. Christian said the drop was primarily due to a reduction in political revenue of $1.3 million from the same period last year. Saga’s station operating expense in Q1 2017 increased 1.5% to $25.1 million while operating income decreased $1.9 million to $3.5 million.
Saga, which currently owns or operates broadcast properties in 26 markets, including 67 FM and 32 AM radio stations, expects all transactions to close during September, 2017.